DeGeorge Financial Corp. Announces 1997 Results.

CHESHIRE, Conn.--(BUSINESS WIRE)--March 31, 1998--DeGeorge Financial Corp. reported a net loss of $17.8 million, or $1.65 per share for the year ended Dec. 31, 1997, as compared to net income of $1.2 million, or 11 cents per share, for the year ended Dec. 31, 1996.

The net loss for 1997 includes a non-recurring charge of $3.4 million relating to the closure of the company's distribution centers and the change in its method of providing materials purchasing services to its customers.

Total income decreased by $2.9 million in 1997, to $35.6 million as compared to $38.5 million in 1996, primarily due to a decrease in contract services income of $7.3 million and an offsetting increase of $4.0 million in financial services income, which relates to a change in presentation of interest earnings. The decrease in contract services income was attributable to a reduction in loan closings recorded during the year, which totaled 934 in 1997 as compared to 1,449 in 1996, which was caused by the departure of a large number of the company's most productive sales representatives during the period from July 1996 to March 1997. The company has been vigorously pursuing a lawsuit in federal court against three former employees who misappropriated proprietary information and disrupted the company's ongoing business operations, during and after periods of their employment with the company.

"Of course we are disappointed in the results for 1997. We remain committed to the business, however, and believe that the actions that we have taken to bolster the company's sales force and improve operational methods will enable us to turn these results around," said Peter R. DeGeorge, chairman of the board and chief executive officer.

As previously announced, the company has signed a definitive agreement to be acquired through a merger by a corporation controlled by Mr. DeGeorge, and certain other persons. Under the merger agreement, each of the outstanding shares of common stock of the company, other than shares owned by members of the buy-out group, will be converted into the right to receive $1.50 in cash. The company expects to complete the merger during the second fiscal quarter of 1998.

DeGeorge Financial Corp. arranges financing and is currently managing over $200 million in underwritten construction loans. It provides access to home ownership for people who lack a sufficient down payment or sufficient income to support the purchase of the home they desire through conventional mortgage programs. Through its packaging of financial services and customer support, the company enables its customers to reduce the cost of home construction by eliminating the general contractor, the intent of which is to create an equity position that serves as the down payment for permanent financing upon the conclusion of the home construction process.

CONTACT: DeGeorge Financial Corp.

Salvatore A. Bucci, 203/699-3407